Sport Subsidies Strike Out Again

America is deep into a summer of sports. The U.S. Open has wrapped, the World Cup is underway, and the MLB All-Star Game is around the corner. For sports fans, it doesn’t get much better than this. For taxpayers, it’s a good moment to ask a question that doesn’t always get a straight answer: Does hosting these events actually pay off?

Gov. Josh Shapiro is betting it does—and he’s using taxpayer money to do it. His administration has pumped millions of dollars into sporting events across Pennsylvania this year, promising they will “bring millions of visitors, generate significant economic impact, and support jobs and businesses across the Commonwealth.” Shapiro touted a recent $5 million investment as a way to strengthen Pennsylvania’s status as a “sports tourism designation,” promising massive returns. The investment also included $3.5 million dedicated to the MLB All-Star Game.

Overall, Governor Shapiro’s proposed 2026–27 budget would push total corporate welfare spending to $1.7 billion—a $41 million increase over last year.

But the state has a poor track record with these investments, especially those involving professional sports. Pennsylvania’s Independent Fiscal Office (IFO) crunched the numbers on the commonwealth’s investment in professional baseball stadiums: PNC Park for the Pittsburgh Pirates and Citizens Bank Park for the Philadelphia Phillies. IFO concluded that the investment’s return was unimpressive.

“For Philadelphia, we had about $1 billion in total spending and generating about $45 million in state taxes,” said IFO Director Matthew Knittel. “Pittsburgh was about half of that, about $540 million of spending and about $22 million in state taxes generated.”

Based on those numbers, taxpayers saw a return of 4.5 cents and 4.1 cents on the dollar for Citizens Bank and PNC Park, respectively. This isn’t shocking given a 2023 IFO review that found most state tax credit programs return less than 25 cents per taxpayer dollar spent.

Shapiro is hardly the first politician to pitch corporate welfare, especially tied to sports. For decades, local and state governments have justified public spending on sporting events and venues with promises that the economic payoff would be worth it. (Shapiro, an avid sports fan himself, often indulges in sporting events (including the Super Bowl), courtesy of his connections to shady organizations and their legally questionable gifts.)

For recent proof look to the 2026 NFL draft hosted three months ago in Pittsburgh.

After the announcement that Steel City would host the NFL Draft, the city buzzed with anticipation as officials promised a financial windfall for local businesses. Visit Pittsburgh, the city’s majority taxpayer-funded tourism agency, estimated that the city would see a direct economic boost of $120 to $160 million from hosting the draft. 

The reality fell short. Businesses told KDKA-TV they loaded up on merchandise and food only to take significant losses after the expected rush never materialized. County-wide hotel occupancy levels averaged 75 percent, not much higher than the county’s normal occupancy rate of around 65 percent.

“To say that 75 percent were full during the draft, that’s only an increase of 10 percent. That’s not a whole lot to get excited about,” Dr. Frank Gamrat, executive director of the Allegheny Institute for Public Policy, told CBS Pittsburgh. He noted that pre-draft expectations were that hotels within two hours of Pittsburgh would be fully booked.

“When you look at the economics of it all, it was just a party,” he added, calling the cleanup efforts a “nice one-time shot in the arm.”

The headline attendance numbers also deserve scrutiny. The NFL’s officially tabulated figure of 805,000 counted attendees once for each day they showed up, meaning anyone who exited and reentered the draft footprint, or attended multiple days, was counted two or three times. And among those who attended, just 43 percent traveled more than 50 miles, meaning the majority—57 percent—were locals.

So why the inflated buzz in the first place? Gamrat said it came down to politicians spending taxpayer funds. “If you’re going to spend public money, you have to justify it, and you have to justify it by touting all the wonderful benefits,” he said.

A deeper dive into the city’s spending makes the justification even harder to defend. The city poured an estimated $3 million into the event, including overtime costs and payments to Visit Pittsburgh—a sum Pittsburgh is unlikely to fully recoup, the Pittsburgh Tribune-Review reported. 

“There is no financial boon for the city of Pittsburgh here,” Councilman Anthony Coghill, D-Beechview, said at a City Council meeting. “If we have our expenses covered at the end, that’s great.”

Pittsburgh’s NFL Draft experience isn’t an outlier; it’s the pattern. A recent economic review of the past five decades of public spending on sports venues—$33 billion from 1970 to 2020—found “near-universal consensus evidence that sports venues do not generate large positive effects on local economies.” 

Economists point to a simple explanation: Sports spending isn’t net-new spending; it’s other spending relocated. The review found that although sports events attract some out-of-towners, they also crowd out tourists who would’ve spent money on other city amenities. And since most sports spending is by locals, it’s not new economic activity. Instead, it’s money that is pulled away from other local businesses, such as restaurants, theaters, and shops. 

As the Tax Foundation put it, citing the same report, state and local governments are “subsidizing development within a single neighborhood, with no tangible benefits for the rest of the city or state.” In fact, since the public funding comes from across the city and state for the benefit of a narrow part of the population, sports subsidies “often impose an invisible tax burden on consumers in the form of forgone public services, such as first-responder equipment, parks, and public transportation.”

Given widespread agreement from economists that sports subsidies don’t pay off, why do politicians keep doling them out? The answer is simple: They make for good politics, even if it’s bad policy.

None of this means major sports events aren’t worth hosting or celebrating. But they’re not worth subsidizing. When the spotlight fades and the fans go home, taxpayers are left footing the bill.